If Park Bank is liable for not spotting Sujata "Sue" Sachdeva's $34 million embezzlement from Koss Corp. and has to reimburse the company, Koss Chief Executive Michael Koss should also be ordered to personally pay the public company he runs, the bank argues in a new lawsuit.

Grant Thornton, Koss Corp.'s former auditor, should also have to pay a portion of any award that may be ordered, Park Bank argued in the latest twist in a long-running court fight stemming from Sachdeva's massive embezzlement.

"Park Bank denies any and all liability to Koss in this case," the bank said in its action. "Nevertheless, should Park Bank be found liable to Koss (Corp.) and required to pay damages to Koss, in this case, those damages will have been the result of a common liability of Park Bank, Michael Koss and Grant Thornton, thereby entitling Park Bank to (a) contribution from Michael Koss and Grant Thornton."(10)

Proposal would limit city money to for-profit colleges

Milwaukee would put limits on city financing help to for-profit colleges, as well as development firms that build such schools, under a proposed ordinance.

The Common Council will consider the proposal as for-profit Everest College, just north of the Park East strip, winds down its operations after posting a poor performance in placing its students in jobs.

The proposal would require a for-profit college, or a development firm, seeking city financial assistance to document the college's compliance with U.S. Department of Education regulations pertaining to the college's program integrity.

The ordinance is to be reviewed by the Common Council's Zoning, Neighborhoods and Development Committee at its Feb. 5 meeting. Seven of the council's 15 members are co-sponsoring it.

Several for-profit colleges have opened in Milwaukee in recent years.

The most controversial was Everest College, which is leasing a 45,000-square-foot facility,at 1311 N. 6th St., from an investment group led by developer Dan Druml.

Everest is operated by Corinthian Colleges Inc., which critics say preys upon students by persuading them to take loans to pay for courses of little value. Supporters said California-based Corinthian serves about 100,000 students annually and that lawsuits filed by former students amounted to a relative handful of complaints.

Everest opened its Milwaukee branch in October 2010, but last September announced its plans to close after a poor job of placing its students in jobs.

The city Redevelopment Authority in 2009 and 2010 approved a plan to allow Druml to borrow $11 million from a private lender by selling bonds issued in the authority’s name.

Druml used cash raised by selling the bonds to TCF Bank to fund the conversion of vacant former industrial properties into offices and other commercial space, including the space leased to Everest..

The city was not a lender in that transaction.

Druml’s investment group, not the city, is responsible for repaying the debt to the TCF. Issuing the bonds through the authority made them tax-exempt, and allowed Druml to pay a lower interest rate to TCF.

According to city records, the proposed ordinance is supported by the board of the Milwaukee Area Technical College, which operates its downtown campus just a few blocks south of the Everest location. Everest’s plans for its downtown site were opposed by several MATC faculty and students.

The ordinance's main sponsor is Ald. Milele Coggs, whose district includes the Everest site and who opposed the college's Milwaukee location.

Commercial Real Estate News

A large industrial building, located on Milwaukee's north side, has been sold to a local investment group that plans to continue redeveloping the property.

An affiliate of Phoenix Investors LLC purchased a 206,200-square-foot portion of the former Square D industrial plant, 4041 N. Richards St., for $1.45 million, the firm announced Monday. It was sold by Stag II Glendale LLC, a subsidiary of Boston-based Stag Industrial Inc., in a transaction brokered by Robert Dufek of Dufek Realty LLC and Jim Larkin of Colliers.